South Korea's LG Display expects a more than 50% rise in its shipments of liquid crystal display (LCD) TV panels in China in 2009, banking on falling prices to bolster demand, a senior executive said.
The LCD industry has been hit by a deepening global slowdown that has discouraged consumer spending, causing prices to fall sharply last year.
But that has actually helped LG Display's business in China as a halving of prices for LCD panels last year made LCD TVs affordable in smaller Chinese cities as well as rural areas where income levels are much lower compared with first tier cities, said the firm's sales chief in charge of south China.
“Believe it or not, the LCD TV business in China is hardly affected by a slowing economy. Demand continues to pick up in big cities while the second- and third tier-cities also have great potential,” Gyo-Young Song told Reuters on the sidelines of an industry event.
LG Display, which competes with Samsung Electronics Co globally, recently raised its forecast demand for LCD TVs in China to 20-24 million units this year, up from 15.7 million units.
The firm's own LCD TV panel shipments to the country were roughly 2.5 million last year, he said, adding growth in shipments this year could match the pace of TV market expansion.
LG Display, the world's second-biggest maker of LCD screens, said in January its global shipments would fall by a low single-digit percentage in the current quarter and price drops would be limited.
LG's smaller rival Chi Mei Optoelectronics Corp expects its LCD panel shipments to rise 20% this year, supported by Chinese government policy to boost rural consumer spending on electronics.
Its shipments of LCD panels for televisions are estimated to rise about 25% this year to 25 million units, Chen-lung Kuo, the company's vice president for global sales and product development, told Reuters earlier in the day.
Song said LG Display was not benefiting so far as those policy incentives were mostly targeted at smaller and cheaper LCD TVs, while the South Korean firm had been focused mostly on larger screens in recent years.
But the firm, which counts major Chinese appliance and TV makers TCL Corp and Sichuan Changhong Electric Co among its clients, is shifting its strategies quickly.
“We have started supplying smaller panels to our customers here and will continue to do so given the changing market situation,” he added. (Reuters)